GE Expands Strategic Ties with MoT and ENR to Augment Growth

General Electric Company GE recently entered into an agreement with one of the largest economic institutions in Egypt and the Arab world, Egyptian National Railways (ENR). The company signed a Letter of Intent with the Ministry of Transportation (MoT) and the ENR, worth $575 million.

Per the deal, the company will supply 100 ES30ACi Light Evolution Series Locomotives, as well as offer a 15-year service agreement for parts and technical support in ENR’s new and current fleet. This agreement is so far, the largest deal signed between the parties. According to the deal, General Electric will offer training to enhance technical skills of over 275 ENR engineers and employees.

The company’s ES30ACi Light Passenger Evolution Series Locomotives consist of 12-cylinder, 3,200 horsepower GE Evolution Series engine. The locomotives can be used to transport both passengers and freight.

ENR’s fleet currently includes approximately 80 GE Evolution Series locomotives to help transport people and goods critical to Egypt’s economy. This agreement will help ENR improve its rail infrastructure and meet the transforming needs of the people.

The company will be working closely with the MoT and ENR on the entire process. This deal reflects GE Transportation’s strategic efforts to expand its global presence, fulfil international customers’ requirements and capitalize on the strong opportunity.

General Electric has been associated with Egypt for over 40 years. With over 700 employees in the country, the company works with its partners in the public and private sector. This agreement builds upon the company’s ongoing partnership with the MoT and ENR.

Despite the change in its top-level management, the company has been expanding its business and launching new products to augment growth. Recently, it announced the launch of its expanded Predix-based software applications suite. With the latest ‘Digital Utility’ solutions, energy traders are connected to valuable, real-time plant productivity and capacity data to permit more profitable, analytics-informed trading.

Per a market research conducted by Markets and Markets, the global transportation management system market is expected to grow from $78.20 billion in 2017 to $202.14 billion by 2022, at a CAGR (Compound Annual Growth Rate) of 20.9%. Based on this report, we can conclude that if General Electric continues to augment its transportation solutions and capabilities it will be well positioned to outperform its peers and improve its top line, going forward.

However, General Electric has underperformed the Zacks categorized Diversified Operations industry in the last three months owing to macroeconomic challenges and fluctuations in currency exchanges. The company reported an average loss of 2.6% against 2.6% gain for the industry in the same time frame. We expect the company to improve its performance on the back of its strategic decisions.

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